When small business owners look to diversify their business, or even start a new business, they often run into a serious roadblock. They find that their business idea already exists, or at least some part of their idea does.
For many, this roadblock turns into the end of the road for their idea. But should it? Often, what they are seeing is not a reason to give up on their idea, but a reason to tailor their idea so it fills a void. Let’s look at an example.
WePay’s Big Move
PayPal is now the defacto giant in online payment systems, but the founders could have easily given up on their idea when faced with the fact that major banks pretty much owned the “merchant account” space for decades. They didn’t give up on their idea, though. Fast forward a decade, and now WePay is challenging PayPal for a share of that space.
Why on earth would someone try and take on a company that has 85 million accounts and around $71 billion passing through those accounts on an annual basis? Because they noticed a small gap in the PayPal process. PayPal is great for accepting single payments, but it isn’t designed to take payments from multiple payees.
Filling a Gap
The WePay model is predicated on the fact that groups of people often come together to buy things — a vacation rental for spring break, a vehicle for a roadtrip, etc. PayPal doesn’t have a method for making those payments (though it does allow one person to collect money from a group).
WePay ignored the fact that they were going up against the 800lb gorilla, and pursued their idea anyway. Time will tell if they have what it takes to succeed, but the point is that they didn’t give up on the idea because there was a bigger player already in the space. They tailored their idea to fill a void that existed in the business model of the big player.
Going Up Against the Big Guys
As small business owners, we have to find ways to diversify our offerings. Offering complimentary services, products or solutions, even if someone else does it in a bigger way or on a larger scale, can often provide a valuable additional source of revenue.
A friend bought me a sign which I look at every day. It says: “What would you do today if you knew you couldn’t fail?” I’m not one for motivational sayings, but every day I look at that and think, “that’s a good question.”
So which 800lb gorilla are you going to tame?
Image credit: PaulMT
